Wednesday, 17 February 2016

Good inequality vs bad inequality

From The Evening Standard:

Strong recent employment growth and low inflation had pushed typical household incomes in London up by 2.9 per cent higher than with before the financial crash of 2008, said a Resolution Foundation report. But once the cost of homes was included, living standards fell 3.9 per cent since 2008 – which the foundation said was by far the biggest fall anywhere in the UK.

“Londoners have experienced some of the strongest income growth in recent years, with typical household incomes now well above pre-crash levels,” said Matthew Whittaker, chief economist at the think tank.

“But the wider picture on living standards changes completely once housing costs are included. On this measure living standards have actually fallen over the last seven years, and by far more than anywhere else in the UK.”

This is an example of bad inequality.

Tenants are worse off, owner-occupiers are slightly better off and landlords are laughing all the way to the bank.